Committee assembled to assess Children’s Hospital finances

El Paso County Judge Veronica Escobar told ABC-7 on Friday that she can’t imagine commissioners court would be open to a tax hike to bail out El Paso Children’s Hospital.

Former University Medical Center Board Chair Ron Acton will head a new strategic planning committee that will assess Children’s Hospital’s financial viability. He said his goal is bigger than figuring out whether Children’s really owes UMC up to $59 million for rent space and support services.

“To ensure the continued care of El Paso and our region’s children at El Paso Children’s Hospital,” Acton said.

Acton said he plans to bring in outside experts to assess the situation, namely those who specialize in changing Medicaid reimbursements regulations. Children’s CEO Larry Duncan said the hospital isn’t collecting as much of its charges as was originally planned.

“The estimated return was approximately 40 cents on the dollar,” Duncan said. “The best we’ve realized is about 31 cents on the dollar. So that’s a pretty profound, when you’re looking at $300 million worth of gross revenue a year, pretty profound.”

We still can’t talk hard numbers, because Children’s has yet to provide ABC-7 with its financial disclosure Form 990 from fiscal 2011.

The strategic planning committee will have members from Children’s, El Paso First and University Medical Center. UMC Board Chair Tracy Yellen said they will begin meeting April 23.

“We’d rather it not take months and months, but we’re willing to work as long as it takes, and we’ll know more about a more definitive timeline in the next couple months,” Yellen said.

Acton was a natural choice to chair the committee, given his involvement in developing the 2007 financial feasibility report that helped convince voters to pass the $120 million bond issuance to build Children’s.

“Apparently it is harder than we thought it would be,” Acton said. “We were not overly optimistic that El Paso needed an independent children’s hospital, and that El Pasoans wanted their children to be able to remain in El Paso. We weren’t overly optimistic about that.”

According to that 2007 report, the hospital was supposed to turn an operating profit in each of its first five years. But Escobar told ABC-7 on Friday that if the goal of the Children’s Hospital was to make money hand-over-fist, this community would have built one a long time ago.